An IPC Policy Roadmap to Economic Recovery
By Chris Mitchell, vice president, global government relations
As the unprecedented COVID-19 crisis continues to unfold, IPC is calling for a bold, sustained policy agenda to help the electronics manufacturing sector weather the economic downturn and support the economic recovery.
There can be no doubt that governments all over the world should take extraordinary measures to keep the electronics manufacturing sector healthy. According to new, soon-to-be published data from IPC, our industry supports more than 5.3 million U.S. jobs and drives more than $714 billion in U.S. GDP, almost 4% of total U.S. GDP. Every U.S. electronics manufacturing job supports an estimated three other jobs in the U.S. economy.
Our industry’s role is equally important – and in some cases even more important – in the economies of other nations. Electronics are at the heart of thousands of products and hundreds of industries worldwide, with healthcare prominent among them. Our supply chains need to keep flowing to keep the overall economy growing.
Over the last month, governments and central banks around the world have taken a series of actions to blunt the economic carnage. In the United States, IPC commended President Trump and Congress for reaching agreement on a $2 trillion economic stabilization package including $500 billion in loans and loan guarantees for hard-hit companies, including $17 billion for businesses critical to national security; plus another $350 billion targeted to help small businesses; and $50 million for the Hollings Manufacturing Extension Partnership, which helps small- and medium-sized manufacturers maintain and expand their markets.
Moreover, the Federal Reserve’s decision to lower interest rates and inject cash into the nation’s financial system will help maintain liquidity at a time when firms of all size need it. Many other national, regional, and local governments have taken similar actions.
And yet, we’re still on the front end of this emerging crisis, and more will need to be done.
For all these reasons, IPC consulted with its members and industry experts and developed an IPC Roadmap to Economic Recovery, with additional steps that we recommend governments should take to help sustain our industry and the broader economy. Those steps are:
Keep Essential Electronics Manufacturing Open
- States and localities should adopt the Department of Homeland Security’s (DHS) definition for “critical infrastructure,” which covers factories related to defense and healthcare; commit to keeping these critical manufacturing facilities open; and ensure that curfews do not impede a healthy workforce from getting to and from manufacturing facilities.
Support Supply Chain Resiliency
- Congress should establish a $10 billion Electronics Manufacturing Initiative to enhance the resiliency and security of the nation’s electronics value chain by establishing public-private partnerships focused on the following priorities:
- Capacity: Grow domestic capacity for electronics manufacturing and establish systems to monitor capacity in times of crisis.
- Capabilities: Spur investment and R&D in artificial intelligence (AI) and other technologies that make U.S. manufacturers more globally competitive.
- Workforce: Bridge the skills gap through more robust federal support for online workforce training and credentialing.
- Resiliency: Establish metrics for industrial base resiliency with capacity, capabilities and geographic diversity as key factors.
- Security: Integrate resiliency and security initiatives to strengthen the trusted electronics supply chain.
Spur Global Trade by Cutting Tariffs
- The Trump administration should suspend the imposition of import duties through December 31, 2020 on all products from countries that agree to provide reciprocal treatment for U.S. exports; and allow companies to defer payment of import duties through December 31, 2020.
- The Trump administration should reinvigorate negotiations with China on a “Phase 2” deal and suspend Section 301 tariffs on imports related to healthcare and other vital supplies necessary to combat COVID-19.
- Congress should increase funding for U.S. export promotion programs, including the U.S. Foreign Commercial Service and Small Business Administration, to help U.S. manufacturers compete in the global marketplace.
Delay Non-Essential Rulemakings
- The Trump administration should put a 90-day pause on non-essential regulatory rulemakings unless they are directly related to urgent public health, environmental health, or economic recovery efforts. We need our business leaders to focus on maintaining compliance with existing regulations while taking on appropriate pandemic response actions. A 90-day pause on new proposals and implementation of new requirements will likely guarantee better compliance in due time.
Facilitate Shipping & Transportation Recovery
- Governments at all levels should support the continued and robust operation of U.S. ports to ensure so that food, medical equipment and other vital supplies will continue to reach people.
- Governments should incentivize airlines to expand cargo capacity and keep air freight rates on par with historical norms.
- Congress should enact landmark transportation legislation that, among its goals, expands capacity on U.S. freight corridors.
Support the Financial Security of Manufacturing Workers
- The Labor Department should facilitate federal and state cooperation to allow companies to pay a portion of wages to underemployed workers who may be receiving unemployment benefits.
- Congress should provide a tax credit for employers who continue to pay workers who are quarantined, have exhausted their allotted leave time, or have had their workplace shutdown.
Keep Manufacturing Workers Healthy
- CDC should issue guidance related to cleaning processes, social distancing, and other operational practices that can help stem the spread of the virus in facilities that must stay open given the “essential” nature of their production.
- Congress should enhance tax deductions for employers who invest in safety equipment, including hand washing stations, respiratory equipment and cleaning products.
These actions – expressed in terms aimed at U.S. policy makers but applicable to policy makers all over the world – would allow electronics manufacturers to serve the near-term needs of a world in crisis, while also providing immediate and long-term economic stimulus.
If you agree with the proposals in the IPC Roadmap for Economic Recovery, I encourage you to download it and share it with your elected officials. The Roadmap will form the core of IPC’s advocacy agenda for the foreseeable future.
Meanwhile, if your company is experiencing any problems or uncertainties caused by the government’s response to COVID-19, we want to hear from you and assist you. IPC’s coronavirus resource page, including webinars with industry experts and tips for what you can do, is here.
If you would like to receive our weekly advocacy reports and occasional action alerts to get involved in our advocacy, visit our “A Team” page and sign up.
As IPC President and CEO John Mitchell said in his keynote speech at APEX 2020, “This industry knows all about change. We are disruptors, and we are used to being disrupted ourselves. … The companies that will thrive amid the radical changes occurring all around us will be the ones who take responsibility and lead the change.”
IPC will continue to be your partner and supporter through all the changes that lie ahead.